Should Money Market Accts be a larger part of your fixed income allocation?

[VanWinkle]

Audrey is right. Some of the higher quality bonds were up during the crisis, not down like everything else.

I second this on audreyh1- High quality/government bond funds will most likely zig when equities zag.

If you are reaching for yield with low quality or leveraged funds, then zig-zag is not relevant.

 

[jazz4cash]

The current rates on quality bonds/funds is just too low right now. I can’t get comfortable buying them at these low levels as a hedge against an equity event in a rising rate environment. I’m more comfortable with CDs as substitutes.

 

[sengsational]

I know you’ve brought this up before, as you had limited choice in your 401K.

2008 was a good lesson in what constitutes a high quality bond fund. Not all bond funds were hurt. There are low cost high quality bond funds that did fine during that crisis. However, if your bond fund had high exposure to commercial debt, it was hurt. But even with the 2008 hit, general core bond funds recovered much more quickly than equities and high yield bonds. So they still helped soften the blow.

If you lump all bond funds together and don’t distinguish between credit quality then I guess there is no useful lesson?

We did talk about this before, and you're right, not all bond funds are the same. Good that you reminded the readers here of that before TSHTF! Because now, they can do something about it...not like me in 2008, thinking I was good, but wasn't.